15-year old MBSL MIDCAP Index announces 2016 composition

In a pioneering move, MBSL constructed a stock market index, the MBSL MIDCAP Index, which measures the aggregate price level and price movements of medium size companies listed on the Colombo Stock Exchange (CSE). The index, which came into operation in 1999, is revised annually and looks at the Middle Range Market Capitalization, Liquidity and Profitability of the firms to be included in the MBSL MIDCAP Index. 

Benefits of the MBSL MIDCAP index

The MBSL MIDCAP Index can be used as the benchmark index by individual and institutional investors which prefer growth but are prepared to withstand only conservative levels of volatility in their equity investments.

It can be used as the benchmark index for the introduction of MBSL MIDCAP linked index funds. The MBSL MIDCAP Index generates valuable signals for portfolio managers for switching from larger-cap more sensitive stocks to midcap less sensitive stocks with more growth potential in response to changing capital market conditions. The MBSL MIDCAP Index focuses on profitability, helping to screen stocks with better future prospects that will cross to higher market capitalisation in the coming year.

The MBSL MIDCAP Index is in effect from 1 January 2016 and the criteria for selecting the 25 stocks of the index remain unchanged. They are:

• Middle Range Market Capitalisation as at 30 November 2015.
• Liquidity based on number of trades during the year.
• Profitability within the last two years.
• The range for market capitalisation for 2015 was Rs. 2.73 Bn-Rs. 27.26Bn. With the stock market movements, this range has been adjusted for the change in the ASPI annually. Accordingly, the range of market capitalisation for 2016 is Rs. 2.57 Bn-Rs. 25.7 Bn.